With Form w2 and 1095 Deadlines Just Around the Corner, What's Changed?

WHAT’S NEW : THE IRS TAX FILING HAS A NEW THRESHOLD

While the new IRS instructions for prepping, distributing, and filing the 2023 Forms 1095 B/C and 1094 B/C remain mostly the same, the electronic threshold for filing has changed.

Where employers were required to file electronically if they had at least 250 aggregate forms, now employers with ten forms in aggregate are required to file electronically.

You must file electronically if you cumulatively submit at least ten forms to the IRS tax filing system, including ACA Forms 1094.1095, w2 forms, and 1099s.

Here is an example: Suppose you have;

• Three 2023 Form w2's to file
• Six 2023 Forms 1095 B to file
• And one 2023 Form 1094 B to file

In that case, you must file all of them electronically with the IRS.

Another example: Suppose you have;

• Three 2023 Form w2's to file
• Five 2023 Forms 1095 C to file
• One 2023 Form 1099 to file
• And one 2023 Form 1094 C to file

In that case, you must file all of them electronically with the IRS.

The IRS tax filing has an established Affordable Care Act Information Returns System (AIR) for electronically filing your forms.

WHAT CAN YOU DO AS AN EMPLOYER?

Determine how many aggregate forms you must file to the IRS and then do it electronically if they pass the new ten-form threshold. Here is a link to an in-depth IRS guide on the filing requirements. Reach out to us if you need guidance on filing your ACA forms.

Large business employers with 50 or more full-time employees should offer any employee who worked full-time for a month a Form 1095 C. Don't forget to file your Forms 1095 C and 1094 C together with the IRS.

If you need 1095 C codes or 1095 C instructions, visit the IRS tax filing website or contact us for a detailed but simplified guide.

Don't forget to confirm whether your state requires an additional annual filing – states like Massachusetts, Rhode Island, The District of Columbia, California, and New Jersey do.

WHAT ABOUT SELF-FUNDED PLANS?

For small business employers offering level-funded, self-funded, or an alternative method of funding, check with your vendor and confirm how this change affects you and whether you will incur charges for completing your annual returns. 

Use Form 1095-B for self-funded employees and your IRS report for individuals with minimum essential coverage. Also, ensure you provide Form 1095 C and 1095 B to every employee in the self-funded plan, whether full-time or part-time, as you file with the IRS.

HERE ARE YOUR DEADLINES!

FILING WITH THE IRS

If you are submitting Forms 1094 and 1095 by mail, the deadline is on 28th February 2024.

If you are submitting electronically, the deadline is on 31st March 2024.



PROVIDING YOUR EMPLOYEES WITH THEIR RECORDS

Employees who worked full-time for at least a month should receive their Form 1095 C by 1st March 2024.

The Form 1095 deadline for giving copies to your employees is also on 1st March 2024.



STATE 1095 DEADLINES

State 1095 deadlines start on the 31st of January and go up to the 30th of April 2024.



LACK OF FILING RESULTS IN PENALTIES

Failure to meet 1095 deadlines or the 1095 C instructions, or if you report incorrect information, will result in IRS penalties. For instance, the penalty for failing to file a 1095 C form is $310 but with a cap of $3,783,000.

Failing to follow the 1095 C instructions follows a similar penalty structure.

• Note: If you have reasonable cause for failing to file, a tax professional can help you get a waiver for the penalties.

CONCLUSION

Don't spend 80 hours of your year worrying about ACA compliance. Depend on us to help you get through this burdensome process with ease. We help you collect adequate and accurate employee data, show you how to report to the IRS tax filing system, and notify your employees about their ACA enrollment and eligibility. Let us help you manage your ACA compliance. Contact us today.